Microsoft (MSFT) should consider closing its money losing video game division. According to the FT, Nintendo’s Wii has now outsold Xbox 360 even though its has been on the market a year less.
Data from Enterbrain and NPD Group “sales data from each console’s launch through to the end of July (or the end of August in Japan), consumers have bought 9 million Wiis, 8.9 million Xbox units and 3.7 million PS3s.”
Microsoft lost $1.9 billion in its device division in the last fiscal year. Revenue was $6.1 billion. It could buy Ninetendo for $50 billion and have a real business. Microsoft could pay about half in cash, so the dilution to its share holders would be less than 10% if the other half were paid in stock.
It might work. It is better than losing $2 billion a year for the next 25 years.
Douglas A. McIntyre
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